A Comprehensive Comparison of Portfolio Management Services vs Mutual Funds – Which One is Right For You?

Berry Mathew

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A Comprehensive Comparison of Portfolio Management Services vs Mutual Funds - Which One is Right For You?

Investing in the stock market can be a great way to grow your wealth and increase your financial security but figuring out which approach is right for you can be daunting. Should you choose a Portfolio Management Service or a Mutual Fund? These two investments have many similarities and key differences that can significantly impact your return. This article will compare Portfolio Management Services and Mutual Funds to help you decide which investment option fits your portfolio best. We will examine the benefits and drawbacks of each. By the end of this article, you will have a better idea of which investment strategy is the right one for you.

Overview of Portfolio Management Services (PMS)

PMS is a personalized service where HNIs can get their money managed by professionals. PMS requires the higher ticket size 50 Lakh or above. A portfolio management service is offered by a financial institution or investment manager responsible for picking your investments and managing the portfolio for you. You pay a fee to have someone else choose and manage your assets.

Overview of Mutual Funds

A mutual fund is an investment that pools money from a group of investors and uses that money to buy stocks, bonds, or other securities. Mutual funds are managed by a team of investment professionals who decide which stocks will be in the fund and when to buy and sell them. One can buy units in a mutual fund but not the underlying shares directly. Your investment’s value will fluctuate with the stocks held in the fund, but over time it is expected to rise and give you a strong return on your investment.

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Features of Portfolio Management Services 

One of the key benefits of a portfolio management service is that you can work with a financial advisor who can help you create a diversified portfolio tailored to your specific needs and risk tolerance. You can use it to get valuable market knowledge and make wise investment decisions. When working with a financial institution that will manage your assets, choose a company that also offers tailored middle office solutions to help manage costs and control operational risk across your investment platform.

Features of Mutual Funds 

Like a portfolio management service, mutual funds allow you to diversify your investments by spreading your money across various stocks and other securities. Mutual Funds help you invest beyond stocks as well. You don’t have to worry about monitoring your stocks’ performance in the market; mutual funds allow you to have everything in one investment. Mutual Funds can regulate better than PMS as they deal with money of retail investors.

Additionally, mutual funds are a more affordable approach to buying several stocks since they often charge lesser costs than a portfolio management service.

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What should you choose? PMs or MF?

Your investment portfolio, risk tolerance, and financial objectives will all play a role in deciding which option is best for you. MFs is better option if you have a modest corpus, PMS can be a good option if your corpus is minimum of 50 lakhs.

Let’s assume that you want to invest Rs. 1 crore. Now, except for low-value MF schemes, you could invest concurrently in one PMS scheme and many MF schemes. It will increase the likelihood that you will make a profit from these investing opportunities. People holding higher capital can invest both in MF and PMS. Portfolio Management experts can also charge performance fee over management fee.


Now that you know more about the differences between portfolio management services and mutual funds, it’s time to decide which investment approach is best for you. Both options provide a way to diversify your investments and spread the risk across several stocks. The best approach for you will depend largely on your investment goals, the amount of money you want to invest, and your risk tolerance.